While I don't have data to cite right now either, a decrease in government subsidies is more likely to push prices DOWN, all else being equal. Increasing loan disbursements will, effectively, increase the available money supply in that market (of young adults entering college); and significant increases in money supply are by themselves inflationary, i.e. tend to push prices up.
To help see why, imagine you have one apple to sell. Alice and Bill are quite hungry, and both have $5 to spend. The maximum you can get from selling your apple is $5, because that's all either has to offer.
Suppose I come along and loan $20 each to Alice and Bill. Now if one offers $5, the other has the power to outbid. This new situation certainly won't DECREASE the amount of money you'll finally get for the apple, and could in fact end up dramatically increasing your profits.
This is oversimplified, but illustrates the legitimate macroeconomic essence, I think.
Of course, we have to qualify this with "all else being equal", which the real world is too messy for. I thought total student loan payouts in the USA had been increasing on average the past few decades, but don't know for sure: can anyone verify one way or another? The best I could quickly find is the "Average Debt Over Time" chart here:
Update: while government-sponsored student loans can be considered a form of subsidy, I realize now you were referring to something else, lr. So, my comment is kind of tangential to your point :)
To help see why, imagine you have one apple to sell. Alice and Bill are quite hungry, and both have $5 to spend. The maximum you can get from selling your apple is $5, because that's all either has to offer.
Suppose I come along and loan $20 each to Alice and Bill. Now if one offers $5, the other has the power to outbid. This new situation certainly won't DECREASE the amount of money you'll finally get for the apple, and could in fact end up dramatically increasing your profits.
This is oversimplified, but illustrates the legitimate macroeconomic essence, I think.
Of course, we have to qualify this with "all else being equal", which the real world is too messy for. I thought total student loan payouts in the USA had been increasing on average the past few decades, but don't know for sure: can anyone verify one way or another? The best I could quickly find is the "Average Debt Over Time" chart here:
http://projectonstudentdebt.org/files/File/Debt_Facts_and_So...